How to start a manufacturing business
Manufacturing may have the image of a dwindling industry in the
UK but it still accounts for a sixth of the economy. Cheaper
operating costs in other markets around the world have damaged this
country's opportunities but as a hub for innovation and ideas,
there is still plenty of room to succeed in the UK manufacturing
If you've got a product idea and the required financial backing,
starting-up a manufacturing business could be the exact route for
you to take.
As the head of a manufacturing business, the structure of your
days will be decided by how involved with different strands of the
business you are.
In the example of a small business, your time will be split
between your involvement with the actual manufacturing of the
product, and selling the completed version. You will have to act as
an entrepreneur, manufacturer, PR and salesman simultaneously,
unless you get so much financial backing so that you can
afford to hire any of these.
In time, you may be able to completely hand over both the
manufacturing and selling of your product to employees in order for
you to take a more executive role but, in the early days of
starting up, a lot of the earnest will be on you.
As with many businesses, the length of your day is up to you.
However, while the manufacturing may be finished at a certain
point, the research and efforts into creating sales and interest in
your product will not be. Be prepared to succeed only on your own
There are two separate parts of your location decision when
starting up a manufacturing business. You need to know where your
product will be made and where it will be sold.
While starting up, some manufacturing businesses may be able to
operate out of your homes, but if you require specialist equipment
of large spaces, you may have to find an external office. There
will be space available all across the country but prices do
vary. Look around and find the cheapest option, which fits your
requirements. Don't get caught out by not having enough access to
electricity or anything else you may need.
The question of where to sell your product is an easy one
to answer. It would be foolish to limit yourself to regions or
shops to sell from these days - take advantage of the internet
and get a professional website to sell from as well as stores on
eBay, Amazon and the other available online trading options.
Try to get your product into national and, if possible,
international stores. This will require a lot of time to set up
meetings and convince buyers of the profitability of your product,
but will be a worthwhile venture and take a lot of the selling
strain from your shoulders.
Starting-up a manufacturing business will require a huge
investment of time, but on top of that you will need a variety of
- A flair for innovation
- Interpersonal expertise
- The ability to multi-task
- An analytical mind and a good grasp of accounts
- Knowledge of your markets
As a manufacturer, you will need to be able to efficiently
create your product to the highest possible standard. Assuming you
do not have the financial backing to pay others to manufacture
your products from the outset you will need to find a way of
learning how to reduce waste from your production and get the
manufacturing process up and running as quickly as possible.
A lot of what you need to learn about starting up a
manufacturing business will come from your first few attempts at
each strand. Your production technique will change dramatically
before you settle into a routine, your business planning skills
will be developed through rewrites with a business manager and your
sales pitches will never stop chnaging and improving.
The space you'll require depends entirely on what you are
manufacturing. If your product is small, being made solely by
yourself and needs little equipment to create, your house will
suffice. However, if you need employed manufacturers or large
equipment, there are ample choices for where to have your idea put
Ashtenne provide a great service for finding
specific rentals based on your location, size and equipment
requirements. You will have to contact them to find out prices, but
you should expect to need high levels of financial backing to be
able to utilise manufacturing space.
At a start-up level you may not need any staff. For this option,
you will have to find investors, manufacture your product, sell it
through one of many avenues and conduct research by yourself. It
isn't an impossible task but it can be a daunting
If you feel you need it and it is possible in practical
terms you could hire a selection of people to help you in your
business. From business managers to manufacturers, freelance sales
executives and market researchers, the options are there if you
have the finances. Each of these will take some of the strain from
your shoulders, but will also take some of the profits from your
Manufacturing start-ups can require a huge amount of backing.
You are unlikely to be able to proceed without a substantial bank
loan or investment.
Make sure you include all possible costs in your business
plan. From the manufacturing of the goods themselves, to their
transportation costs, wages and money spent on advertising, if a
prospective investor can spot a cost you haven't, it will be the
end of the discussion.
Create a list of all the reasons why the product you have in
mind will succeed as a business and memorise them. There will be
many points along the road to starting up when you will need to
know the items on your list.
It is vital you write a thorough business plan. If you
can't do this yourself, seek assistance. If there is one industry
in which a good plan can make or break an investment meeting, it is
You must know your growth plan. You can't be short-sighted when
starting up this business. You need to know how long it is until
you will start making a profit and when you will need to hire
staff, utilise a separate manufacturing space.
Decide on your sales avenues. This is discussed below, but there
are a multitude of sales options available and you need to consider
your target markets and the correct way to sell to them.
Read our feature, How to start a business: the ultimate
The selling of your product will be the most difficult and
significant element of your start-up. You have to convince people
why they need your product, and why they should spend money on it.
This will be done through different routes.
With the decline of retail shops in Britain and the copious
options available, using the internet to sell your products should
be the first choice of any entrepreneur. Personal websites and the
multitude of digital retailers are all great options. The profits
lost through this avenue are lower than from terms with shops and
the only down side is the advertising of the product would fall
back onto you.
Some people won't consider the option of door-to-door selling as
viable these days and trying to sell a product over the phone may
harm your business' name. However, if you are persuasive and
looking for a low cost way to start picking up some sales, this
tactic should not be disregarded and there will always be
specialised events to sell at.
Selling through shops
You'll need a slick sales pitch to convince shops to
stock your product, and you will lose a substantial proportion of
your profits to them, but once they have accepted terms on what you
are making, you can relax. If you are looking for a way to make
sales without constantly having to get involved, this is definitely
a good route to consider.
- Maintain regular and accurate costs list to stay completely in
line with what your profit levels are.
- Put as much time and thought into your sales pitch as possible.
While it is good to learn from each attempt at conveying why your
product is worth an investment, and worth buying, it is better to
get it right first time.
- Be prepared for this product to become the centre of your
life. Opportunities to promote and sell what you are manufacturing
will be abundant and not utilising them will see your sales suffer
- Investigate stock prices for your materials intensely and
establish good relationships with suppliers to ensure you are
getting the lowest costs possible.
- Learn how to negotiate. Individuals, investors and retailers
will all be looking to get as much out of you as possible. Do not
allow them to take any more of your profits than fits with your
Not considering how much of your time this will
Starting-up a manufacturing business is a huge undertaking and
must be treated as such. While research and development can be done
in your spare time, if you are serious about your product, you will
soon need to dedicate all of your time to it.
Not putting money back into the business
Once profits start to come in, it will be tempting to treat
yourself for all your hard work and determination. However, you
will need to leave enough money for the company to overcome any
difficulties and expand in some quite expensive fashions.
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